Kennecott Canada Exploration has entered an agreement with Intertech Minerals (IML-V) to earn a 60% interest in the Afridi Lake diamond property, 320 km northeast of Yellowknife, N.W.T.
Previous work on the 129,951-acre property identified a series of narrow bodies resembling kimberlite dykes, in the extreme northwest.
A composite 711.9-kg sample yielded seven macrodiamonds (+5 mm) and 59 microdiamonds weighing a total of 0.0114 carat. The largest recovered stone is described as a dodecahedral fragment measuring 1.12 by 0.83 by 0.24 mm.
To earn its interest, Kennecott must spend $25 million on exploration, or advance the project to a production decision. The company will be required to spend $1 million within 12 months and $5 million on signing the agreement.
The Afridi Lake property is 45 km southeast of the Diavik diamond project of Aber Resources (ABZ-T) and Kennecott.
In addition, Kennecott will subscribe to a $300,000 private placement of Intertech, consisting of 462,000 units priced at 65 cents each. A unit consists of one share and one share purchase warrant exerciseable at $1.25 until July 19, 2000.
Intertech, which currently holds 90% of the project, has also negotiated an option agreement to reduce the original property vendor’s royalty interest to 2% from 5% and eliminate its 10% carried interest in consideration for future payments totalling $6 million cash and 1 million shares.
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